On the day that the Philadelphia School Reform Commission approved three new charter schools, the state Supreme Court issued a ruling Tuesday that could have grave implications for the cash-strapped district's finances and operations for years to come.

The court ruled that the SRC had no legal power to suspend portions of the state charter law and school code. The ruling strips the commission of extraordinary powers it believed it had - and used.

It was too soon to say exactly what the fallout for the school system would be - district lawyers offered no official comment - but early indications were ominous.

By declaring unconstitutional a portion of the takeover law that the SRC has relied on heavily, many of the major actions the commission has taken in recent years - up to and including bypassing seniority in teacher assignments - could be subject to reversal.

"It could be disastrous for children," Commissioner Bill Green said after Tuesday's SRC meeting. "I believe the SRC acted in good faith when it made those decisions based on what the written law was. To have it overturned in its entirety is potentially disastrous."

Green said the decision could "require reshuffling of all teachers in the district" midyear because the SRC has bypassed seniority when making assignments.

"We have an affirmative duty to reverse decisions" made under the provision of the law that was struck down, Green said. "I don't see what choice we have if it's truly been struck down as unconstitutional."

Green said that although he was disappointed in the decision, he also understood the court was "calling balls and strikes" as it interpreted the law.

The ruling came in response to a lawsuit filed by West Philadelphia Achievement Charter Elementary School, contending that the part of the state takeover law that allowed the SRC in 2013 to force schools to agree to enrollment caps was unconstitutional.

The school had also asked the high court to rule that the 1998 law that led to the state takeover of the district in 2001 violated the Pennsylvania Constitution because it allowed the SRC to suspend "at will" parts of the code without providing any standards to guide the suspensions.

By a vote of 4-2, the Supreme Court agreed that the special powers described in the state takeover law were unconstitutional. The court's order permanently bars the SRC from suspending laws.

"Naturally, we are very pleased with the result," Robert W. O'Donnell, the lawyer who brought the case on behalf of West Philadelphia Achievement, wrote in an email. "The impact will be very positive on the relationship of the district and charter schools because the district will now be required to observe the same rules as other school districts in PA and not rewrite the law to suit their own purposes."

News of the ruling spread among commissioners during a special meeting devoted to considering a dozen new charter applications, and prompted the SRC to adjourn for a short executive session. Michael A. Davis, the district's general counsel, said the decision would have no impact on the charter proposals the SRC was considering.

Before a packed audience of charter-school backers and opponents, the commissioners heard from parents, teachers, grandparents, students, and others about the dozen applications under review.

Several speakers said the district needs more charter schools to meet the need of thousands of students on waiting lists. Others, including State Sen. Vincent Hughes (D., Phila.), urged the SRC to consider cost before approving new charters - especially given the state budget impasse.

The district spends millions on the 83 existing charters that enroll more than 62,000 students.

District officials said the state law prevents them from considering cost when deciding on charter applications.

Three new charters were approved with conditions. The SRC green-lighted a KIPP North Philadelphia, a middle school for the existing Russell Byers Charter School in Center City, and the Esperanza Elementary School in Hunting Park.

All three proposals that were approved call for opening in 2017 and were submitted by seasoned charter operators who had been seeking to expand for years.

KIPP North Philadelphia will be a K-12 charter that plans to begin with 200 students in kindergarten and first grade. KIPP, which stands for the Knowledge Is Power Program, is part of a national charter network. The local KIPP organization already operates an elementary school, two middle schools, and a high school.

Byers would begin by taking the sixth graders from its existing K-6 charter in Center City. In its first year, the middle school would have 214 students in sixth and seventh grades.

Nueva Esperanza Inc., which has two other charters, applied to open Esperanza Elementary School in Hunting Park starting with 138 K-5 students.

After the Esperanza vote, a group of supporters in yellow T-shirts expressed jubilation.

District Superintendent William R. Hite Jr. said after the meeting that each new charter seat costs the district about $7,500 per year.

"It means we have to include in our planning the cost of these new seats," he said. "But it does have an impact, and it will have impact on what we are able to do."

Last year, the SRC approved five of 39 applications.